Home Food & Drink Oakley City Council Unanimously Approves Agreement with Skipolini’s Pizza

Oakley City Council Unanimously Approves Agreement with Skipolini’s Pizza

by ECT

On Tuesday, the Oakley City Council unanimously approved an agreement that will bring Skipolini’s Pizza to the City of Oakley.  The agreement would include a 13-year lease followed by an option to purchase the building.

Vice Mayor Sue Higgins explained she heard concerns about the amount of pizza parlors in the City, but noted they also have a number of taco restaurants and other types of business saying people are going to eat where they are going to eat.

“I see this as an awesome opportunity for Oakley, but also see the double edge sword,” said Higgins.

Councilmember Claire Alaura stated she thought Skipolini’s should pay the CAM fees (common area maintenance charges) which was estimated at around $600 per month as opposed to the city covering those cost since they were getting $1 rent.

Councilmember Randy Pope argued he understood the argument, but noted they were estimated to spend $750k on building improvements which was a net gain for the city. The council ultimately opted not to charge Skipolini’s CAM fees.

Councilmember Michael Krieg explained it was regrettable that Skipolini’s may have an impact on other local businesses, but said the United States is a capitalist country and capitalism was how America works. He further said the council cannot control the number of pizza businesses in the city.

“I am very excited about the idea of Skipolini’s, it’s been a restaurant my family and I have been going to for a long time,” said Councilman Randy Pope who compared the number of pizza parlors to that of number of storage units in the city.

“If they fail, its their dollars, not the taxpayers dollar. Skipolini’s knows their business better than anyone. They know what they are getting into and there is enough market share to go into business,” said Pope who was quick to point while they don’t control the market, they did need to be aware that through their agreements they could create an unfair economic agreement that other businesses may not have.

Mayor Kevin Romick suggested that Skipolini’s would be a draw downtown which was something the city desperately needed.

“We are coming out of a unique situation with COVID-19, we are unsure what type of world will exist 6-months from now and what businesses will be able to reopen,” said Romick. “In light of that, to have someone come in and say they will invest $700k in the community and take on the risk… its very unique. This city desperately needs a draw downtown and Skipolini’s will give us that draw due to its reputation which we haven’t had in the past and build around it”

According to the Staff Report, the Lease Agreement will be for 3070 Main Street where the building was operated first as Carpaccio’s Restaurant from 2013-2017 followed by 2017 until the present where it was operated by Buon Appetito. Due to the COVID-19 and a difficult time to reach profitability, Buon Appetito has decided not to reopen as a result of the COVID-19 closure. Skipolini’s would now take over the lease.

Skipolini’s estimates it would spend as much as $750k on improvements over the next four months from an outdoor patio area to remodeling the inside of the building to match the look and feel of their other locations.

According to the new Lease Agreement, the City of Oakley will enter into a Lease Assignment Agreement with Buon Appetito in exchange for release of liability for unpaid rent, release of security deposit paid to the City and release of any known claims. In addition, Buon Appetito will enter into a Lease Assignment with Skipolini’s, assigning the terms of the existing Lease and Lease Amendment to Skipolini’s.

Then, the City of Oakley and Skippolini’s would enter a Second Amendment under the following terms:

The term of the existing lease shall be extended by thirteen years and two months, through May 31, 2035. In addition, Skipolini’s will have the option to extend the lease term for three, five-year periods.

In consideration of the proposed capital improvements to the building that Skipolini’s wishes to make, the rent for the first 28 months will be $1.00 per month. After the initial 28 months, rent will be increased to $5,000 per month, at a flat rate for the remaining term of the lease. During the initial 28 months, the City will pay the associated building CAM charges, County Possessory Use Tax and the Ironhouse Sanitary District assessments. At the end of the 28 months, the City will continue to pay the County Possessory Use Tax and the Ironhouse Sanitary District assessments, but Skipolini’s will begin to pay the CAM charges pertaining to the building.

Skipolini’s will be making tenant improvements to the building for a period of time not to exceed 120 days. The City will waive all associated City permit fees. Skipolini’s will also apply for a loan, not to exceed $75,000, from the Downtown Revitalization Loan Program to help fund a portion of these improvements – specifically the painting of the building, new awnings and the outdoor improvements.

Skipolini’s will also have the opportunity to purchase the building in the future. Starting June 1, 2025, and for the remainder of the term of the lease, Skipolini’s will have the ability to purchase the building at the value obtained by the appraisal adjusted for inflation on an annual basis

Staff Report: Click here

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Oakley okie May 27, 2020 - 7:42 am

Will hold my breath waiting on the 3/4 million dollar improvments, considering the city is loaning them the cash to buy awnings. Are they that broke or the city that stupid to give money away?

Carol May 27, 2020 - 1:14 pm

the deal sounds fishy!!!! I HOPE there was not a bribe somewhere!!!!!!!!!

Robert C. May 27, 2020 - 8:14 am

Would the Council please explain why the city should be a commercial landlord at all instead of just SELLING the property? How is this “capitalism,” Councilmember Krieg, if the city is selecting what business gets the lease?

That Guy May 27, 2020 - 7:27 pm

Robert, the city as a landlord can make massive revenue, helping fund the PD and so many cool city programs….did you know the city of Antioch owns that massive lot and building that Walmart leases? Plus collect taxes on revenue, one of the only great decisions Antioch that I can think of off the top of my head.

Robert C. May 30, 2020 - 9:07 am

“Massive revenue”? Sorry, but I don’t but that. Municipalities should not be the commercial real estate business.

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